Are you overwhelmed as a Plan Sponsor?

Have you been oversold?

It can easily happen, especially when moving from a Fully-Insured to a Self-Funded Health Plan?

What did the salesperson mean when he said "Plan Sponsor"? What was that scary term "Fiduciary"? Oh, and how come I'm not saving vast sums of money?

I often find, there is a dangerous mixture of high promises, stories about the 'best-case scenario", and honestly buyers who had selective listening moments or just simply hope and optimism that over-rode their rational sense and the put everything on auto-pilot right after signing the commitment letter.

A practical scenario:

A very nice gent named "John" called up, stating that Claire over at the dealership gave him my name as a person who could help. He’d run into problems with his TPA and felt like he wasn’t getting the support or advice necessary to run the program well and wanted to chat.

During the course of the conversation about “what’s going wrong, John starts telling his horror story that he is experiencing denials of claims on 3 employees and can’t understand why the same claims where getting paid last year. John is also not shy to express that he feels overwhelmed with the amount of claim approval input his TPA keeps asking him to weigh in on surrounding these larger claims, plus asking input on approving prescriptions, and wanting him to approve extra money for facilities who keep balance billing members,

Oh, and the big kicker is that John says his projections of money on hand to pay for everything has already exceeded his full year’s budget—but it’s only August. This is to the point, where John says the words that most people keep silent out of shame, but he says them out loud: "I’m worried I’ll start making decisions about claims based on the money we don’t have for the next employee because I won’t understand the medical/clinical implications and just do it all based on money and not medicine.”

What happens next:

Wow, where to start? We have to pause to tell John that there isn’t an easy solution but still keep him engaged and willing to focus on a course correction that works well in the long-term, versus jumping to plug holes that won’t fix the actual problems with the plan.

John needs a reset button. He needs one for his finances for sure, but the money problem is a symptom of the ongoing problem that needs to be fixed first. John needs to reset his relationships with his TPA, Stop loss vendor, Medical Management Vendor, and PBM. And, he needs that reset button pushed quickly as he needs to redefine their relationship and also own the role he has played either by victim of bad sales advice or as the perpetrator of a plan sponsor who won’t own their role. 

We've been here before, but John hasn’t lived through this rough patch and the maturing period as the plan sponsor. Our first step is to help John coordinate and unpack how each party communicates with his plan as well as the methods each party communicates with each other regarding the feedback loop of member experience--and do they match the service level agreements and ultimately understand if each party is following the provisions of the actual Plan Document. Because we've done this before it isn't scary, but rather empowering for the plan sponsor. We'll ask John to gather all the vendor contracts he has access to and you schedule a 2~3 hour recap with our team and his team to build the baseline understanding of the contract language as well as listen for feedback items from his team that aren’t working as lined out in the Plan Documents, Service Agreements, or from the original sales-pitch.

After this meeting, we'll reinforce with John, that he is going to need to really own the plan and the outcomes moving forward. It was wrong of the old advisor to let him believe he didn't have to be involved. And John is in a good spot to take hold and dig in. He has not only a right but a responsibility to all of his employees to own the fact that how the plan operates is completely and utterly dependent on how well he holds his service providers accountable, all of whom are all acting on his behalf to provide the best member experience and plan experience possible. 

We can clearly see that John is totally capable because he’s already confessed his ability to show both member empathy and financial understanding to the health of the plan---but we know he needs a better support system. This is where we invite John into our partnership to be his advisor who helps guide him and let him know what is realistic to expect from his vendor partners. We'll also get John embedded in our ongoing educational meetings for him and his team so that they become more empowered plan sponsors with the goal of spreading an engaged culture of plan ownership beyond just his team but through the company’s community of plan participants.

The future is looking brighter....but

John is on board and starting to sound excited and relieved that things might get better. This is very encouraging, but there is a pitfall ahead. 

Again, we've been here before, but John hasn’t, his team hasn’t, and quite honestly it is really easy to slip back into auto-pilot.

We know that we are likely to see the TPA, or PBM, or Medical Management services improve and then take a steep decline within 60 or 90 days after our reset meeting. And we know that we need to start identifying potential partners and prepare for a contingency plan that can be executed in short notice. We also need to bring John to the discussion and let his team know what our team is doing, and why we are doing this exercise as we give him honest feedback over the next 30 or 60 days. We know that waiting much longer to end a service provider relationship can also be just as damaging as causing a knee-jerk reaction to do so immediately. 

The tactical fixes:

We often discover a few items that can be immediately improved, and these shouldn't be ignored or pushed down the road. 

The very first we noticed is that John’s problems are that the TPA has a Utilization Management/Case Management team that has been missing in action. None of the 3 large problem claims are being engaged in any way by the TPA or any of their care coordination/case management services. We also figured out that all 3 of these claims are being paid to an out-of-network vendor who is charging the plan exorbitant charges—a practice we often see where certain providers trust that a health plan won’t pay much attention to Non-Network charges and just pay a reduced % that the vendor can then inflate in order to make more money than an In-Network provider can. 

To this end, we can apply a 2 part approach. First, we have the Plan Documents updated to reflect paying Non-Network providers to a “Maximum Allowable Charge” language that is based on the lowest cost of either a negotiated payment rate or a stated percentage of Medicare. (yep--there's more work to this than it sounds--but it is a foundational change). Secondly, we engage a Claims Evaluation vendor who already has really good local relations with various vendors such as Dialysis, Imaging and Surgical Centers. We often work to create direct communications with our clients and this vendor to empower their relationship as they work to negotiate a fair fee payment first with the current vendors, but then if that isn't possible, we know that it will be paramount to direct our current members to one of the care providers who have a contract or a history of lower costs for the same or higher quality care.

Often there are 2 other immediate tactical provisions we identify, and both focus on an overall lack of communication with the employees. A simple and easy step us often creating new employee educational materials and spending time focused on discussing these materials and practical real-life healthcare scenarios with employees. Time is often the missing ingredient of any good plan. The 2nd easy solution is adding an employee advocacy program to triage and improve upon employee engagement in front of the TPA’s service level. Placing in an employee advocacy team that we understand well is important--and also knowing how well this vendor interacts with at least 3 other quality TPAs whom we suspect will need to be evaluated is key. Often we use an advocacy team that is really good at collecting and documenting member feedback and providing insight into service gaps with the different TPA and PBM vendors. This will give both us and our clients a high level of confidence in the event they need to make a TPA switch in the near-term—while only training the Employees to change 1 behavior and learning 1 touch-point versus creating a cycle of multiple changes that could erode employee confidence in the plan and the company’s leadership strategy regarding the health plan.

The takeaways:

1. Guard against making assumptions and really focus on clarifying and understanding everything. Putting the plan on Autopilot is not allowed.
2. Measure advice for immediate fixes especially if just tactical solutions that don’t fix the root-cause problems.
3. Engage yourself as a plan sponsor with a support system where you can gather expertise and experiences from other outside sources
4. Create a timeline of events that you, the plan sponsor. should expect to participate in regarding communication with the TPA and PBM, and with any vendors that have been contracted by either directly or through the TPA’s relationships.
5. Set the expectation that as the Plan Sponsor, you are driving the bus. And demand that you have the right to be supported by your vendor partners and never held captive or left uneducated about the plan performance.